OREANDA-NEWS. On 21 April 2009 was announced, that XXI Century Investments Public Limited (LSE: XXIC) wishes to advise that it continues to experience significant working capital constraints due mainly to the continued turmoil in global capital and financial markets which has also impacted Ukraine. Current market conditions have adversely affected the Company's operations and its ability to sell its assets and raise new financing. The Company continues to conduct active negotiations with all creditors, including banks, in order to modify terms and conditions of the existing indebtedness and hereby announces a proposed framework for the restructuring of its USD175 million 10% Guaranteed Secured Notes due 2010 (the "Existing Notes").

As announced in the Company's trading update of 30 March 2009, the Company has significantly cut its operating expenses and disposed of certain of its most liquid assets to ensure timely payment of interest on the Existing Notes and its other obligations to its banks, all of which were payable in November 2008. In view of the continued depressed state of the Ukrainian real estate market and the Company's inability to attract financing and/or partnerships from local and international sources, the Company remains at a substantial risk that it may not be able to meet its obligations to redeem the Existing Notes on or after 24 May 2009 at the option of holders of the Existing Notes (the "Put Option") as well as to pay interest on the Existing Notes due on 24 May 2009, unless it succeeds in restructuring the relevant payments.

Since December 2007, when a contemplated secondary offering was postponed because of the rapidly deteriorating conditions in the equity markets, the Company has attempted a number of strategic initiatives to raise new financing and improve liquidity. These initiatives included the potential sale of up to a 50% stake in its shopping centre developments, the sale of the new Kvadrat-Perova shopping centre, the sale of its warehouse portfolio and forming аn investment vehicle with a major Ukrainian industrial group. The Company had concluded memoranda of understanding with respective parties on the aforementioned deals during 2008 and, on the strength of these potential transactions, XXI Century issued its USD 150 million Guaranteed Secured Notes due 2011 (the "2011 Notes") in May 2008. However, due to adverse changes in the market, beginning in the second half of 2008, these initiatives did not materialise. The Company repaid the 2011 Notes in the third quarter of 2008 and has been working since with its advisers to identify and secure strategic equity investors. At this time, the Company does not expect that any such solution may materialise prior to the Put Option date.

Accordingly, the Company hereby announces its plans to restructure its obligations under the Existing Notes through a potential offer (the "Exchange Offer") to exchange the Notes for the U.S. dollar denominated Guaranteed Secured Notes due 2010/2012 (the "New Notes") of XXI Century to be issued together with warrants to subscribe depositary interests representing ordinary shares in XXI Century (the "Warrants") and/or through a modification of the terms of the Existing Notes (the "Proposed Amendments"). The Proposed Amendments to the Existing Notes will require the approval of holders of the Existing Notes. Therefore, concurrently with the Exchange Offer, XXI Century intends to solicit consents from holders of the Existing Notes to approve such amendments to the terms of the Existing Notes at a meeting of holders of Existing Notes (the "Consent Solicitation").

Since the trading update on 31 March 2009, the Company has been working closely with its advisors to develop the proposed terms of the Exchange Offer and Consent Solicitation having regard to the following factors:

The current market situation in global capital and financial markets;

The ongoing uncertainty in the real estate market in Ukraine and especially the timing and rate of its recovery;

Recognition of the Company's obligations under the Existing Notes and the importance of safeguarding the interests of the holders of the Existing Notes;

The need and importance of providing additional security to the holders of the Existing Notes;

The diversity of interests of the different types of holders of the Existing Notes - funds and private banking clients;

Finding a sustainable solution which will assist the Company to continue operations and realise the value in its real estate portfolio in order to honour its obligations to the holders of the Existing Notes; and

The imminence of the date for redemption of the Existing Notes and of the next interest payment date.

Drafts of the terms and conditions of the Existing Notes subject to the Proposed Amendments, the terms and conditions of the New Notes and the terms and conditions of the Warrants (the "Transaction Documents") will shortly be posted to the Company's website, www.21.com.ua. The Company will announce separately that the Transaction Documents have become so available.

A summary of the proposed transactions follows below and in the attached termsheets. While every effort has been made to ensure this information is accurate, holders of the Existing Notes should rely on the more detailed information to be posted on the Company's website, www.21.com.ua.

The terms of the proposed transactions contained in this press release and attached termsheets are subject to change. The final terms of the proposed transactions and Transaction Documents will be reflected in the Exchange Offer and Consent Solicitation Memorandum which will be distributed to the holders of the Existing Notes separately. The holders of the Existing Notes should read this document, which will contain important information concerning the proposed transactions, Existing Notes and New Notes.

The Company plans to announce the Exchange Offer formally and commence the Consent Solicitation process very shortly. However, the Company assumes no obligation to proceed with the proposed transactions on the terms currently contemplated or at all.

Proposed Framework

The proposed transactions are expected to give the holders of the Existing Notes an opportunity to choose between one of the following options:

(i)    under the first option, holders of Existing Notes would retain their Existing Notes subject to the Proposed Amendments. The Proposed Amendments include the extension of the final maturity of the Existing Notes to November 2014 and the introduction of an amortisation schedule providing for repayment instalments beginning in 2010 and ending in 2014. The Company would also have an option to capitalise the interest payments under the Existing Notes. Interest on the Existing Notes would accrue at 9% per annum if paid in cash and increase to 11% per annum if interest is capitalised. No write-down in the principal amount of the Existing Notes is contemplated. In addition, the Company will propose certain revisions to the covenants and events of default in the Existing Notes; or alternatively

(ii)     under the second option, holders of Existing Notes would be able to exchange their Existing Notes pursuant to the Exchange Offer for New Notes and Warrants. The exchange of Existing Notes for New Notes will in effect result in a 42% write-down in the principal amount of the debt owing to each holder. If the Exchange Offer is taken up in full, the Warrants will give a right to subscribe depositary interests representing shares representing up to 20% of the Company's issued share capital on a fully diluted basis at a subscription price of U.S.USD 0.01 per share. The New Notes would be subject to an amortisation schedule providing for repayment instalments beginning in 2010 and ending in 2012. The terms and conditions of the New Notes will otherwise be substantially the same as the terms and conditions of the Existing Notes subject to the Proposed Amendments.

TheExisting Notes are guaranteed by the Company's controlled special purpose companies Limited Liability Company "Megagrad", Limited Liability Company "Mriya-Invest" and Limited Liability Company "Investment Group "East"" (collectively, the "Existing Guarantors"). Pursuant to the proposed transaction, both the Existing Notes and the New Notes are expected to be guaranteed by the Existing Guarantors and the following additional companies within the XXI Century Group: Limited Liability Company "Uestland-Ukraine", Limited Liability Company "UNSK", Limited Liability Company "Evrogradobud", Limited Liability Company "Ozzon-Dnipropetrovsk", Limited Liability Company "Selkhozpromresurs", Limited Liability Company "Shvydko-Invest" and Limited Liability Company "Ozzon-2" (collectively, the "New Guarantors", and collectively with the Existing Guarantors, the "Guarantors").

The mechanism for release of the Existing Guarantors currently available under the Existing Notes would no longer be available to the Company. Instead, a guarantee release mechanism would be introduced, allowing the Company to release a Guarantor where necessary to attract project joint venture partners or project financing if XXI Century's remaining shares in the joint venture entity are held through a subsidiary of XXI Century that is or becomes itself a Guarantor, or a sale of a Guarantor or its assets.

The Existing Notes and the New Notes (the "Notes") would benefit from a cash-sweep mechanism, under which the Issuer, on a monthly basis, must use a certain portion of the proceeds received from the sale of any building, project or land plot and other assets to redeem the Notes at par. Under the cash sweep mechanism, when the excess proceeds from such sales (being sale proceeds less costs incurred or taxes suffered directly in relation to the sale and amounts applied to discharge of borrowings secured over the relevant asset) exceed USD10 million, 50% of the excess proceeds will be applied to redeem the Existing Notes and the New Notes on a pro rata basis. However, the first USD5 million of excess proceeds in each calendar will be excluded from the cash sweep.

The Notes would be callable at the option of the Company in whole, but not in part, prior to 24 November 2010, at 50% of face value, from 24 November 2010 to 24 November 2011, at 75% of face value, and thereafter at 100% of face value. This feature is designed to incentivise (i) strategic investors to invest in the Company; and (ii) the Company to find a cash solution for holders of the Notes as soon as possible.

Approval and Timing

In order for the restructuring to be successful, the Proposed Amendments require approval by an Extraordinary Resolution of holders of the Existing Notes, being a majority consisting of 75% of the votes cast thereon at a meeting at which a quorum of the holders of not less than 75% of the Existing Notes is represented in person or by proxy. By accepting the Exchange Offer holders will be deemed to appoint a proxy to vote in favour of the Extraordinary Resolution approving the Proposed Amendments.

The next interest payment date under the Existing Notes is 24 May 2009. On or after that date the Company will also have to make payments to the holders who submit their Notes for redemption pursuant to the Put Option. Accordingly, the Company plans to hold the meeting of holders of the Existing Notes to approve the Proposed Amendments no later than 22 May 2009 and expects to publish the notice of this meeting no later than 30 April 2009.

The issue of the Warrants may be subject to certain corporate approvals by the Company's board of directors and/or shareholders.